The trader that profited from sanctions

Marc Rich built one of the most powerful commodities trading firms in the world by cutting deals where others would not. In the late 1970s and early 80s, he traded oil with sanctioned states including Iran during the U.S. embargo, using a network of offshore companies to move millions of barrels in secret.

This week, we look at how Marc Rich made his fortune by ignoring international restrictions and how his deals led to one of the largest white-collar cases in U.S. history:

• 🏛️ Building Glencore amid sanctions

• 🤝 Trading with Iran during crisis

• 📊 The indictment and the pardon

— Investor Briefcase Team

Marc Rich began his career in 1954 when he joined Philipp Brothers, one of the most influential raw materials trading firms at the time. He quickly gained a reputation for identifying complex but lucrative trading opportunities and worked in markets from Cuba to Spain.

In 1974, he and colleague Pincus Green left to start their own firm Marc Rich & Co. based in Switzerland. Their goal was to take bigger risks and move faster than traditional firms.

He made deals with countries most firms avoided, including Cuba, Angola, apartheid-era South Africa and eventually Iran. These relationships gave his firm access to oil and metals at favorable prices despite the high risks involved.

By the late 1970s, Marc Rich & Co. had become a major name in commodities. The firm would later evolve into Glencore, one of the largest trading houses in the world. However, much of that growth came from operating on the edge of international law.

After the Iranian Revolution, the United States banned all trade with Iran, including crude oil. American companies pulled out, and most Western firms avoided any connection to the regime. Rich saw opportunity. Using a complex structure of shell companies, foreign subsidiaries, and overseas banks, his firm quietly brokered deals with the National Iranian Oil Company.

Over a period of months, Rich arranged the purchase of millions of barrels of Iranian oil, routed through front companies in Switzerland and Bermuda. He sold this oil to buyers across Europe and Asia, often at a discount, generating massive profits.

To support the transactions, payments were processed through foreign banks that had branches in New York, helping to avoid detection, despite the intent being clear.

The Justice Department viewed the deals as blatant violations of U.S. sanctions and foreign policy. Prosecutors began investigating the flow of money, the ownership structures of the involved companies, and the network Rich used to keep his name off of official documents.

What started as a commercial opportunity quickly escalated into a federal criminal case. By the 80s, the government was ready to act.

In 1983, Marc Rich and his partner Pincus Green were indicted by a federal grand jury on 65 criminal counts, facing up to 300 years in prison. The charges included tax evasion, wire fraud, racketeering, and illegally trading with Iran during the U.S. embargo.

Rather than return to the United States to face trial, Rich fled to Switzerland where he would remain for the rest of his life. He continued running his business from exile expanding operations and avoiding countries that had extradition agreements with the U.S. Despite being on the FBI’s Ten Most Wanted list, he remained out of reach.

While Rich lived freely abroad, his companies paid hundreds of millions in fines to settle charges related to tax violations and sanctions breaches. However, Rich himself never stepped into a courtroom.

Then in 2001, during the final hours of his presidency, Bill Clinton issued Rich a full pardon. The decision quickly drew bipartisan backlash. Many critics pointed to the fact that Rich’s ex-wife, Denise, had been a major donor to the Clinton Library and Democratic causes.

Clinton would later go on to express regret over the pardon. He admitted the political cost of the pardon was not worth it and that it damaged his reputation in the final chapter of his presidency.

Marc Rich died in 2013 in Lucerne, Switzerland, still a free man. Though he never faced trial, his case remains one of the most controversial examples of financial crime in modern history.

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Other Finance Figures Who Fled the U.S.

> Robert Vesco: Fled the United States in 1973 to avoid prosecution for securities fraud involving millions of dollars. Vesco lived as a fugitive primarily in Latin America, notably Cuba, until his death in 2007.

> Martin Frankel: Escaped to Europe in 1999 after orchestrating a major insurance fraud scheme. Frankel was arrested in Germany and extradited back to the U.S., where he received a lengthy prison sentence.

> Florian Homm: Left the U.S. for Germany in 2007 after allegations of securities fraud and market manipulation involving Absolute Capital Management. Homm lived as a fugitive in Europe and successfully avoided extradition back to the U.S.

Each week we profile the most notorious investment stories.

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